Deal valued at $306 million

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Fairfax Financial Holdings has announced it will purchase all remaining shares of American Safety Insurance Holdings, Ltd for US $306 million.

The Toronto-based holding company announced that American Safety stockholders will receive $29.25 per share in cash, a premium of 22% to the closing price of American Safety common stock on May 31, 2013, the last trading day prior to the announcement. The deal is expected to close in the fourth quarter.

A Fairfax release states that, “The board of directors of American Safety, after unanimously determining that the merger is in the best interest of American Safety and its stockholders, unanimously approved the merger agreement and resolved to recommend that American Safety’s stockholders vote to approve the merger. Certain of the directors and executive officers of American Safety, who beneficially own approximately 10% of the outstanding shares of American Safety common stock, have agreed to vote their shares in favor of the merger.”

“We look forward to working with the talented professionals in the American Safety team. We expect to enhance our insurance operations in certain specialty lines of business with American Safety’s expertise,” said Prem Watsa, chairman and CEO of Fairfax, in a press release.

The deal also stipulates that, upon its acquisition, Fairfax will promptly sell American Safety’s Bermuda subsidiary, American Safety Reinsurance, Ltd., to Tower Group International Ltd.

According to a press release, Fairfax expects this acquisition will provide the group with $480 million of additional investable assets.

Fairfax stated that it expects several of the American Safety specialty lines groups to move to Crum & Forster and Hudson Insurance Group.

“We are excited to become part of the Fairfax organization, which is highly regarded in the insurance industry. Our specialty insurance platform will fit well into subsidiaries Crum & Forster and Hudson Insurance Group, facilitating a seamless transition for our customers. I want to express my deep gratitude to our employees, business partners, management and board for their role in building our successful specialty insurance company,” said Stephen R Crim, president and CEO of American Safety.

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